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DHL study points to Maintenance, Repair and Operations as top priority for energy companies
by Staff Writers
Bonn, Germany (SPX) Nov 05, 2013


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DHL has released a new global white paper on Maintenance, Repair and Operations (MRO) supply chain management for energy companies. The report shows that oil and gas businesses will require integrated suppliers that are able to support them with end-to-end supply chain solutions.

According to the white paper, logistics suppliers need to provide a global footprint in combination with local market expertise. As a trustworthy partner, they also need to drive cost and process optimization and maintain safety and compliance both on and off-site.

"Forecasts predict that conventional oil production will decline by five percent per year. Extraction from unconventional sources is more complex and relatively more expensive from a supply chain perspective. As such, customers will need complementary expertise from integrated logistics suppliers to meet the challenges of these new geographies and technologies.

The findings of the report show that DHL is well prepared to meet these requirements, supporting energy companies to gain a competitive edge", says Steve Harley, President DHL Energy Sector, DHL Customer Solutions and Innovation.

By expanding their businesses, energy companies are utilizing new production techniques and are developing ever more remote site locations. For lead logistics providers, this requires both a truly global network and local knowledge - to provide a high service quality and address local regulatory requirements.

Additionally, a major development in recent years has been the optimization of production and supply chain management to enhance service and reduce cost. The report points out that customers demand integrated suppliers to introduce more robust metrics, optimize the inventory and find cost-effective transport solutions.

Non-core business functions such as supply chain management have become more complex. Therefore customers are increasingly demanding external expertise to simplify their business and allow their own scarce resources to be targeted at areas of core competence.

According to the report, integrated suppliers need to act as a partner rather than just another provider. This means, for example, that they need to provide value added services, such as the maintenance of a database of key performance indicators (KPIs), to assess vendor performance and rationalize vendor provision.

Last but not least, Health, Safety, Security, Environment (HSSE) and compliance management will remain top priorities for energy companies. Not only are integrated suppliers required to monitor and ensure high standards of HSSE compliance, they also have to introduce processes for accurate data gathering, audit and management to assess contractor performance - raising the bar across the entire supply chain.

The white paper has been developed by DHL in cooperation with FreshMinds, a growth and innovation consultancy. The report is based on in-depth interviews with supply chain professionals and industry experts across North America, the Middle East and Asia Pacific.

To download the report, please go here.

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